Chapter 1 INDUSTRIAL PLANNING

1-1 NEED OF INDUSTRIAL PLANNING

NEED OF INDUSTRIAL PLANNING

Planning is simply looking ahead, pre-determination of future achievements. The aim of industry is to
manufacture quality products at the lowest cost. It is very necessary for the industrialist to be clear
from start what he/she is going to do! No plan can be formed without imagination and foresight.

INDUSTRIAL ENGINEERING

Industrial engineering is concerned with the

design, planning and installation in order to
improve an industrial system. An industrial
engineer needs specialized knowledge of
science and skill in the methods of engineering.
It helps the analysis of work and the evaluation
of the results to be obtained from such system.

1-2 PHASES OF INDUSTRIAL

PLANNING

Industrial planning is a specialized function of the management having practical knowledge of the
industry. It involves the establishment of the process of manufacture. The three phases of industrial
planning are as follows.

a) Financial planning.
b) Product planning.
c) Process planning.

FINANCIAL PLANNING

Financial planning is the planning of

efficient and effective management of money (funds) in such a manner as to accomplish the objectives
of the organization.

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Without adequate finance, no business can have its full potential for growth or success. Money is the
universal lubricant, which keeps a business dynamic, develops products, and keeps men and machines
at work. It also encourages the management to make progress and create company value. The capital
structure of an enterprise cannot be left to chance. Therefore, it must be carefully planned and the
current need & working capital must be systematically worked out. Following information are
necessary in financial planning.

a) What are the financial needs of a new industry?

b) What are the sources of these finances? How are they generated?
c) How can be determined the adequacy of the company’s finance?
d) How are the finances generated from the business itself?

PRODUCT PLANNING

Product planning includes the planning of shape, design, materials, specification and cost of the
products.
Once the product is decided, the designer designs it. The designer tries to make the design, which
minimize production cost. The production engineer can further reduce the production cost by applying
production techniques. The management approves the final design of the product. The product
planning includes,

a) The complicated product is broken into components. The production engineer should utilize the
standard parts where possible to reduce the production cost.
b) The tolerance for each component must be established to reduce the wastage. The function utility
(difference between the upper and lower limit) of each component must be established.
c) Cost of material and labour is prepared.
d) The most important function is to decide which components are to be manufactured and which are
to be bought.

Example: One Japanese motorcycle maker in Pakistan manufactures only 20% of components and
buys 80% of components from vendors.

PROCESS PLANNING

When the product planning is completed, the process planning begins. The process planning basically
related to the layout of the industrial facilities.

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The function of process planning includes the following.
(i) Product analysis.
(ii) Make and Buy decisions. (Even though the make and buy decision is done in the product
planning, we need to do this again in the process planning.)
(iii) Process selection from alternative processes.

Selection of the process is based on technological consideration. The production engineer must be
familiar with various production processes on their use and application. Usually, a component can be
made by alternate methods. Some of them available while some are not. This can also be achieved by
installing additional equipment. The following information is important for process selection.

a) Obtain all information about the components to be made such as quantity, quality, size and
specifications.
b) Obtain all information about alternative methods of producing. The most economic method is
selected. (Economic does not mean the cheapest. This means feasible in economy, including the
consideration of quality and cost.)
c) Obtain all information about equipment and facilities available.
d) The time available to meet the delivery date.

QUESTIONS
1. What is the aim of industry?
2. What is industrial engineering concerned with?
3. What are the three phases of industrial planning?
4. What is the function of money in industry?
5. Answer two necessary information in financial planning.
6. How can production engineer reduce the production cost?
7. Answer one function of process planning.
8. Answer two kinds of information that are important for process information.